Tshwane rejects Eskom’s 19.9% (average) tariff increase
Eskom wants municipalities pay 27.3% more for bulk electricity purchases from July 2018, but municipalities are rebelling
The City of Tshwane has rejected Eskom’s application for a 19.9% electricity tariff increase.
Eskom wants its clients to pay, on average, 19.9% more for electricity from April 1 2018, and has proposed that municipalities pay 27.3% more for bulk electricity purchases from July 1.
But Tshwane has rejected the proposed hike. Mayor Solly Msimanga said the city and its people cannot afford such an increase, as it would effectively mean a 27% increase awaits the city and its residents.
The rejection follows submissions made by the City of Tshwane and other municipalities to the South African Local Government Association (Salga).
The collective objections to the hike include that:
• It is not affordable for the city or to the residents
• There is more room for Eskom to reduce inefficiencies
• Eskom is projecting [its tariff hikes based] on its power projects that have not yet come online, while half the tariff is based on sales forecasts, even though Eskom has acknowledged that sales are dropping
Msimanga said electricity sales in municipalities show a sustained downward trend over the last few years and, in some cases, sales have dropped significantly. "Today, the sale of electricity is at record low levels for all municipalities. The 19.9% tariff hike would put great strain on the City of Tshwane as we already grapple with issues of non-payment, low revenue collections and theft."
The city made it clear that it can not bear any increase that is higher than inflation, saying this would put further strain on the poor. Msimanga said the hike would cost the city more to cross-subsidise the poor.
Last month, Nelson Mandela Bay mayor Athol Trollip said his council was also "vehemently" opposed to the increase.